Plan C

Yesterday Mayor Nutter announced his doomsday budget plan (details to be found at City Paper). This is basically the budget PICA will make the city adopt if something does not change in Harrisburg soon (the state legislature is holding up a change in the sales tax law that the city is relying on to generate revenue for FY 10).

The cuts proposed are draconian. And it is easy to read them as hysterical. Ben Waxman has a post about this today at It's Our Money where he says:

I have seen a number of comments on this blog and others accusing the mayor of resorting to scare tactics. Here is the rationale: Mayor Nutter is intentionally laying off cops and firefighters to get people upset and put pressure on the state legislature. He could easily cut other areas-- health centers, libraries, and recreation programs-- to make up the budget deficit.

There is just one problem with that logic: it's completely wrong. Spending on public safety-- police, fire, and prisons-- dwarfs every other part of city government. About 29% of the city's $4 billion budget goes to these costs. If the city is forced to cut $700 million from the budget, most of it will have to come from the areas where the money is. There simply isn't enough cash in the other departments to make up the budget deficit.

Ben's right about the numbers. If we want a balanced budget absent the revenue raising schemes that require Harrisburg approval, we need to make a lot of these cuts. But the Mayor had a press conference because he wanted a chance to publicly enumerate the cots of cuts to the city. That was intended to get some phones ringing in state legislative offices.

And that's a good thing. All of these headlines will help get this process moving.

If there is any reason to be critical though it'd be the fact that the revenue agreement the Mayor and Council reached in the first place was predicated upon state action. It's not like we didn't know things would be tough in Harrisburg. The alternatives--raising property or wage taxes--came with other political risks that most members of Council and the Mayor weren't willing to take. But still.

Super minor point aobut PICA

PICA isn't necessarily the bad guy if H'burg decides to screw us over. Or if it is, its not in the way you imply, Ray.

From Stan's previous analysis the requirement for the city to pass a budget that sticks on July 1 (and not do a 'redo budget' with different taxes) is a combination of the wording of the Home Rule Charter and a Supreme Court ruling on the PA Constitution. PICA actually made Council deal with the horrible "what if" we may now actually face when they were busy patting themselves on the back about the sales tax budget plan they just passed so I see PICA as sort of a "good guy" in this. Its the law that says we pass the budget only once and PICA just acts like referee to make sure Council and the Mayor don't abuse that process.

Some might even fault PICA if for anything for not doing a tougher job of holding Council's feet to the fire for not enumerating the horrible "what if" scenario in more detail - i.e. that PICA was too lax, not too stringent. If PICA had made Council be more specific about how bad Plans B and C are and how much less than a sure thing the sales tax plan's passage was in Harrisburg, more members of Council might have been more hesitant about hanging all of our fates on the political whims of Harrisburg.
MrLuigi, my cat, actually only types half as badly as I do.

Not quite right, Sean

It's not the home rule charter or the constitution that's the problem, it's a PA statute that is at the basis of the court case that prohibits a second budget.

That can be fixed by legislation....of course, from the same people who might not pass the sales tax plan.

The other alternative is to pass the taxes and go back into court. The PICA law, which was created after the early 60s court case I mentioned above, might (and I emphasize might) give us an opportunity to overturn that decision.

So a very sketchy legal fight

that will not even be heard by the courts until many months after 3,000 city workers have already cleaned out their desks and filed for unemployment.

Sure if we have to, its better than not trying anything but its really not an option to cling on to for hope.

You can't spend taxes that are currently illegal and might or more likely might not stand up in court. In fact I'm pretty sure its a big problem from a compliance/collection angle.
MrLuigi, my cat, actually only types half as badly as I do.

It's not illegal until the court says it is

And how quickly the city is denied the right to collect taxes depends upon what the courts do while they are making up their minds.

Assume Council passes new taxes and someone challenges them. I assume this goes to a lower court first, maybe Common Pleas. What does the judge do while the case is being heard? The judge could stop collection of the taxes or not. My guess is that no Common Pleas judge, elected by the ward leaders and the people of the city and up for a retention vote at some point in the future will deny the city the right to tax while the case is before him or her because a judge who makes that decision will be blamed for Plan C. And I expect that, for the same reason, he or she will ultimately rule for the city.

The it goes to the next level, presumably Commonwealth Court. And that takes some time. If the Common Pleas court has ruled for the city, I would expect hat this decision would hold until the Commonwealth Court has ruled.

Of course it may not work out this way. And I may be wrong about which courts deal with this issue. But if the sale tax is not passed, what alternative do we have except to try to go this route?

I think your understanding of the courts is wrong

Stan already mentioned the court case which establishes current case law.

The case is Mastrangelo v. Buckley. It was decided in 1969 after Mayor Tate decided he needed more cash, mostly for a labor deal. It holds that all authority to tax comes from state law, and that any authority the state gives must be strictly construed. The Court noted that there is no state law that authorizes more than one tax act per year in Philadelphia, although there are some that authorized it explicitly in other places. Therefore, the Court held, even in emergencies such as those contemplated by the Charter Section cited by Sean, Council cannot increase taxes after it enacts the annual budget ordinance. Interestingly, the Court upheld the right of the City to increase fines and penalties after budget enactment since those increases would be exercises of the police power, not the taxing power.

My guess is a judge will have clear and unquestionable case law as a precedent and the decision will take all of 5 minutes to rule on.

I also fear you might be constructing an entertainingly complicated Rube Goldberg-esque legal scenario that does a disservice to the seriousness of the situation we face. I don't think we should content ourselves into passivity on a scenario that bets on the justice system being so politically manipulated to be a mockery of consistent legal logic. Alternately I guess the city could try to raise trash tickets and building permits to $20,000 a piece to try to raise the revenue but thats utterly crappy city policy and might actually be more unpopular than laying off 3,000 city workers, believe it or not. Otherwise its really down to the sales tax or budget doomsday for FY 09-10.

I think your "what if" is not something I feel even one bit comfortable putting even a little bit of faith in though obviously the lawyers here can chime in if they differ.

Basically Council put us in a potentially very, very bad place where there is no alternative and while I honestly believe the Mayor has done everything possible to sell this to Harrisburg, I'm not convinced that Council has put in the same effort.

Like for example Councilman Bill Green took a lot a credit for helping to put together a budget deal based on sales taxes that was not as monumentally stupid as Councilman Brian O'Niel's first take in terms of borrowing costs.
Whether it was still too risky and hence stupid in another way in terms hanging too much on the political whims of H'burg I guess remains to be seen.

But anyway Green took a lot of credit for helping to put together a deal.

The problem according to some is that the reason Rep. Mike O'Brien is grumbling and sabotaging the sell on the direness of the situation the city faces is that he wants to set up Mayor Nutter for political disaster in terms budget amagedden to make Nutter look bad, Green look good for future mayoral ambitions.

That's idiotic political logic however because you sure don't look "mayoral" by wreaking horrible suffering on the people of Philadelphia out of political spite. Or by intentionally sabotaging the plan that has your fingerprints all over it. But I have heard this theory of O'Brien's behavior from several different folks in several different camps so its apparently a popular theory.

If I were Green I would be thinking real hard about squashing this interpretation any way I could. I would in order: a.) go to O'Brien and convey in the most emphatic terms "Hey buddy, you are really doing me no favors here so stop it, OK" and pronto and b.) making a point of putting Nutter to shame for his own efforts to sell H'burg on the plan that jeeze-louise some people were even at one point calling the "Green plan" . That is if I had any real intention of coming out of this mess looking like someone who actually could be mayor rather than a self-interested jerk who values gamesmanship over the fundamental well-being of the city.

Sorry to be so direct, but it really has to be said. If you plan to take credit for the sales tax compromise than you better step up make sure it actually comes to pass. That is unless you want to be remembered as "the guy who's plan left the city out to dry".

MrLuigi, my cat, actually only types half as badly as I do.

I'm just explaining what we might do if disaster comes

And I really don't see any harm in that.

I've been involved in providing some political support for a few court cases in the last few years, including the SEPTA transfer case; a previous SEPTA case, and the library case.

In all three circumstances, there was plenty of good reason for judges to come down on the other side. In fact, in one, and perhaps two of those cases, the best arguments or at least the most obvious precedent was on the other side. (I'm deliberately not being specific here for reasons I'm sure you can appreciate.)

But we won all three times. Why? Because the courts are entirely politicized in Philadelphia. And its not just in public cases. I lost a personal zoning case when the law was absolutely and totally clear that we should have won. But politics triumphed.

That's why Stan pointed out, in his initial post, that we can't be sure what would happen if Council passed alternate taxes.

Of course, no one wants to go down that road. It is totally imperative that the state legislature give the city the authority to raise the sales tax.

But if disaster happens we've got to be prepared to tell City Council to take other action. Council is already an all too passive and defeatist bunch all to ready to let someone else make decisions they don't want to have the responsibility of making. How many times in the last few years have we seen Council members say, "My hands are tied."

Your giving them excuses for inaction, Sean. I think that's a very dangerous thing.

And if you are worried about my thinking ahead giving the state legislature an out, then keep in mind that if they say the city can raise other taxes, we can demand that they empower us to do so. All it takes is a statute, not a constitutional amendment or charter change.

On your last point, I think you are right Sean. If plan C goes into effect, Bill Green's political career may be affected.

Plan A hasn't been shot down yet

until that happens when they obviously have not taken that very real possibility seriously enough speculating on very outside chance "what ifs" undermines their commitment to making sure the possibly very stupid plan they have made for us works out. After it actually is shot down I'll happily talk about any number of long shot fix-it schemes.

But the plain truth is that Council took an easy option and has not done enough to take responsibility yet for that risk.

I'm trying to understand this

And if you are worried about my thinking ahead giving the state legislature an out, then keep in mind that if they say the city can raise other taxes, we can demand that they empower us to do so. All it takes is a statute, not a constitutional amendment or charter change.

This is completely moot. The whole point of why they would deny us the sales tax is that Republicans in the state legislature don't think anyone, anywhere in the state of PA should be allowed to raise taxes. They actually believe in their heart of hearts think the way you get out a recession is you cut and slash public spending no matter what multiplying effects the things that government actually sometimes does best have on overall economic activity. They are pissed off about Obama's stimulus package and they feel the way they will prove they are right is to swim against that stream here in PA.

If idealogues from this perspective deny Philadelphia its ability to tax itself in the form of taxation - regressive sales taxes - they historically most approve of why in the world would they pass legislation to give Philly some other capacity to self-tax?
MrLuigi, my cat, actually only types half as badly as I do.

The difference is the level of responsibility

Voting to give us authority to raise the sales tax directly implicates legislators in our sales tax going up.

Voting to give us the authority to do a second budget is somewhat more indirect.

You may not think this much of a difference or will make much of a difference. But take it from someone who spent a bigh chunk of his first ten years as a political scientist studying legislatures that it is and it does.

OK hypothetically so then we have a second budget

and Council can raise new taxes. Wage taxes are still barred by Act 71 and Council still has not fixed the BRT or deferments against gentrification-related property tax hikes and meanwhile the city is already not paying vendors and shortly has to start putting city workers on unscheduled furloughs.

Pretty much the same political logic that got us to sales tax the first time round puts us right back there again. Or they have to invent some other type of tax that H'burg will also have to approve and balk at.

I feel like you are missing the degree to which the compromise they made was the innevitable result of years of inaction in terms of getting a hold on property taxes and the BRT. The size of the whole means that if its not sales tax, at least in part it has to be property tax.
MrLuigi, my cat, actually only types half as badly as I do.

I'm not missing it

I campaigned in support of a number of ideas to fix the property tax system in 2007, long before the Inquirer article.

If you want me to wring my hands and tear my clothes about the multiple difficulties we are facing here, Sean, consider it done.

We have an unbelievable mess and everyone needs to understand that it's not just the economic crash that has created it. It's thirty five years of broken politics in Philadelphia.

I think I've done more than most people in this city to drive that point home.

Organize now because prospects of future solutions are very dim

I don't think the problem with raising the sales tax is State Senators and Representatives worrying about bearing "responsibility" for raising it.

Legislators from outside the City aren't worried because their constituents largely won't pay it. Indeed, business interests from nearby municipalities may favor the hike, hoping shoppers will leave the City and patronize them.

Legislators from inside the City already support the sales tax (except Mike O'Brien, whom we should vote out of office next year).

No, I'd guess there are four reasons

1) General "I never support raising taxes ever" creeds among some Republicans

2) General uninformed belief among non-Philadelphians that Philly always wastes so much money, that Philly should not raise taxes until it makes more painful spending cuts

3) Legislators worried the State may yet turn to a sales tax hike of their own

4) Given the contentious down-to-the-wire State Budget negotiations, holding up the Philly sales tax hike gives Republicans some leverage over City Democrats who want the sales tax

The problem is: those inspired by the last two reasons are probably prone to one or both of the first two.

Those who never support tax hikes or who believe the City is a utopian Socialist free-for-all aren't going to support our getting a chance to write a new budget with new tax hikes.

So I think what we're looking at really is, pretty much, an either/or situation.

Either we get the sales tax now or we lose health centers, libraries, firehouses, and a good deal of public safety, among other atrocities.

We need to pass the sales tax now because passing any tax hike later is very very unlikely.

Back to the fight

If we do get out of this and avoid budget armegeddon, we should all make a big mental note to remind Council to finally "get around" to sorting out the terrible corruption at the BRT and problems with assesments and the need for "circuit breakers" or deferments with property taxes. Having the BRT sit indefinitely as a horrible rotting mess really tied their hands and limited their options when tough economic times put the squeeze on. The state gaming law (thanks again Act 71) blocked wage taxes and the mess at the BRT politically killed property taxes as even a partial option.
MrLuigi, my cat, actually only types half as badly as I do.

If Council can't act, why are they scheduling meetings?

Today's Inky on what happens if the state does not act on the sales tax by August 15:

"In that case, PICA gave the city 15 additional days to submit a new five-year budget plan, which would require Council members to formally meet to take action.

Toward that end, three special Council session have been scheduled. They are planned for Aug. 18, for the introduction of a budget amendment; Aug. 25, for a public hearing on the amendment; and Aug. 31, for a final vote on the legislation."

Does council just ratify a 5 year plan suggested by the Mayor? What if it doesn't do so? Can it propose higher taxes for the last four years? Can it propose borrowing this year on those higher taxes?

I'm sure they can borrow legally

I'm not sure they get the kind of money they need at sane interest rates though. Philly's bond ratings are not exactly stellar and its not exactly the best time to borrow that kind of money.

I'm sure Council is consulting legal opinions about their options in court. But its not exactly hopeful.

MrLuigi, my cat, actually only types half as badly as I do.

The Commonwealth withholds money from the City

if the City fails to pass and submit a financial plan on time to PICA.

According to Section 4.12 subsection b of the 1992 Agreement between PICA and the City:

The City and the Authority acknowledge that the Act provides that if the Authority certifies that the City is not in compliance with any Financial Plan in accordance with this Section 4.12, the Secretary of the Budget shall notify the City that such certification has been made and that each grant, loan, entitlement or payment to the City by the Commonwealth, or any of its agencies, of Commonwealth funds and payment to the City from the City Account, shall be suspended pending compliance with such Financial Plan.

Not submitting a financial plan on time is defined as one way of not being in compliance.

Ah, I thought the Mayor submitted a five year plan

I forgot Council votes on it.

Then what if Council votes to put new taxes in the five year plan and PICA approves it and Council votes those taxes. That might muddy the waters enough to keep taxes in place while the Courts deal with the mess. And then what if takes a whole year for the Supreme Court to issue a final ruling. Don't laugh. They've done stuff like that before.

Again, I'm not saying this is how I'd like things to go. The GA really needs to vote for the sales tax increase. But we should not give up and accept Plan C if it doesn't happen.

PICA would veto a budget with tax hikes it considered illegal

putting the City in noncompliance with the Agreement, and stopping State payments to the City.

That "solution" would create a fresh new set of disasters that would stay in place until the City submitted a budget like Plan C, that keeps expenditures in line with revenue without the tax hike, and includes payments the Commonwealth thinks the City has to make.

I'm not agreeing with this position, but it seems pretty obvious that that's the position we're in, so I'm pointing it out.

Something similar would happen too I'd imagine, if the City tried to stop payments on the Convention Center, or tried to borrow from sources PICA doesn't approve our borrowing from.

I agree that should the worst happen, and the City should be denied its needed tax hike, we all should work in the 15 days we have, to make sure the Doomsday Budget is as livable as possible.

But it's going to include a year of closed libraries, rec centers and likely health centers, reduced public safety and the reality of greater misery to the City's most vulnerable -- more people will suffer and die in the upcoming year.

That's a part of any budget without new revenue.

That's why even this supporter of belt-tightening and greater austerity, who has a great aversion to raising taxes on the nation's most heavily taxed city, sees very little silver lining if we don't get the sales tax.

Emergency sources of money

Keep in mind that if we don't get the sales tax, and can't raise other taxes, we have a very very serious problem, but for only one year. We can raise other taxes for the next four years in the five year plan.

That means that we can borrow on future tax revenues, as I pointed out above.

And there may be ways to muddle through this year without the drastic cutbacks the Mayor is talking about. The PWA is sitting on a $150 billion water rate stabilization fund on which the city can possibly borrow. We can delay payments for the stadia and convention center. We can delay payments to SEPTA, which has a 100 million in reserve. (Rolling the payments from June 30 to July 1 gets us into the next fiscal year.) We can raise fees on many things. (The legislation that eliminated our right to appeal zoning board decisions also authorized a wide range of fee increases.)

I'm glad that Mayor Nutter is making clear what Plan B (or C) means as a way to prod the GA into action. But Plan B is utterly unacceptable and the city should exhaust every alternative before implementing it.

where's the tea party?

PICA an unelected unaccountable body in charge of Philadelphia Tax dollars! So much for Philadelphians cry of no taxation without representation. No wonder the tea party was someplace else.

But it does make one wonder where today’s “teabaggers” are. These folks complain about elected officials raising taxes on the super wealthy but are completely silent when an unelected body taxes control of Philadelphia’s budget.

I just wish I could think of the appropriate Lewis Carroll quote.
Lance Haver

Lance, PICA isn't the bad guy

The General Assembly and possibly our Council for risking so much on the political whims of H'burg is. PICA is just a referee for whether the budget plans the city passes make even remote sense. If it doesn't they are tasked with the unenviable job of telling the City they won't be receiving state reimbursements because they are manufacturing bogus numbers. Whatever numbers, whatever policies the city chooses politically - high taxes and high services or low taxes and miserly services - makes not one whit of difference to PICA. All that matters to them is that numbers for whats coming in the door match the numbers going out the door.

If we actually love our services we should expect Council to figure out a way to actually pay for them - otherwise the city's bond rating goes to hell, we can't borrow money for any infrastructure at all and those services we all love go away anyway. Frankly you are too smart a man, Lance, to blame the messenger for bad news. Services worth having are services worth actually paying for, plain and simple, and if they are worth paying for, they worth attempting to realistically figure out how you will continue to pay for them 5 years from now.

PICA is in essence Harrisburg saying "We don't trust local politicians to be honest with the numbers so we will impose a neutral non-elected referee to report to us whether the numbers make sense". The reason they are not-elected is precisely what makes them better at being neutral referees. If that seems like a paternalistic relationship - it is - but not because of PICA itself (who do a generally fair and neutral job of what they are tasked with) but rather because the state imposes it on us. The state does, we should note, also impose a similar structures on Pittsburgh and half a dozen smaller cities throughout the Commonwealth.

Again PICA doesn't care how much Philadelphia taxes or spends just that its projections for what it will collect are realistic and match up to what it plans to spend. If we actually care about the things we spend money on in this town, it only makes sense to support making sure the money will actually be there to continue to support those wonderful things 5 years from now.

Council put us in what may be a very, very bad situation but blaming PICA for that situation is akin to blaming the guy who serves you the notice for a law suit for the law suit itself. He's just doing the job he was tasked with. He's not the guy suing you. He's not the opposing lawyer. He's not even the "crooked judge" to rail against. Progressives need to get past blaming "shooting the messenger" on PICA.

If we do get stuck with Plan C and we do end up borrowing an immense ammount of money to float us for this one budget year to make Plan C less totally freakin' horrible, the cost of the loan is likely to be very expensive. But if we are able to borrow any of that money at all we should all do a big dance thanking PICA over the last decade or so for helping to bring up our bond ratings so we were able to borrow that money in the first place.

So blame H'burg for not passing our sales tax plan if they screw us and blame them for passing Act 71 in a way that takes wage taxes completely off the table as even a partial solution and blame Council for procrastinating how they can make property taxes a fairer option for so many freakin' years. But don't blame PICA - they didn't make the mess.
MrLuigi, my cat, actually only types half as badly as I do.

PICA is not just a messenger.

They have real power, not just advisory power. Here is what the agreement between the City and PICA says:

WHEREAS, in furtherance of the legislative intent of
the Act and the actions to be undertaken by the Authority
pursuant to the Act and this Agreement, the City, by Ordinance
(Bill No. 1437) of its City Council, approved by the Mayor on
June 12, 1991, has enacted exclusively for purposes of the
Authority a one and one-half percent (1½%) tax on wages,
salaries, commissions and other compensation earned by residents
of the City and on the net profits earned in businesses,
professions or other activities conducted by residents of the
City (the "Authority Tax");

Even if you don’t agree with me that people lives are more important then delaying bond payments for six months to a year, wouldn’t you agree that in a democracy people should be able to decide that? Why should an unelected body be allowed to control tax dollars without a court order?
Lance Haver

People did decide it.

They elected the State Legislature which passed the law that established it. You may feel that process was flawed but it was process approved by democratically elected officials.

We don't elect traffic cops either but we elect the Mayor who appoints the Police Commissioner and we attempt to hold both accountable to the same laws we charge them with enforcing.

PICA's only power is to stop the city from writing checks it can't cash and there is nothing "progressive" about the city using fictions to spend money it doesn't have. Your "not making bond payments" is akin on a personal level to starting a new credit card every time the electric bill is due and then intentionally lieing in the box where you write down your income. Eventually you can't get any more bonds at all and suddenly Philly can't rebuild the South Street bridge or fix our sewer system, no matter how broken it is. After that the entire city gets taken over by the state and we end up like Camden and thats hardly a "triumph of democracy". You can't spend money you don't have, ultimately. What is "progressive" about what ammounts on a personal level to fraud?

Alright PICA is one part messenger and one part traffic cop. But just because you think its great to drive 95 in a school zone, thats not what the rest of PA thinks. I doubt its what even the rest of Philadelphia thinks. Put it up to a ballot initative and phrase it honestly - "Should Philadelphia borrow money it doesn't intend to pay back following the rules ultimately screwing its ability to borrow money for real infrastructure down the line?" and I guarantee you it will lose.

Being committed to progressive services means you have to also be committed to paying for them with real money, not continuously kiting rubber checks.

Council is ultimately responsible for this fiscal emergency if thats what happens. Not PICA.
MrLuigi, my cat, actually only types half as badly as I do.

So its nice to hear Pillegi spell it out

He's holding 3,000 city worker's jobs - all our libraries, all our rec centers, 600-800 cops and in our Police Commissioner's opinion the lasting power of our recent 30% decline in homicides - hostage to the state budget. No ifs, no buts, no maybes.

The Republican leader of the Senate, Dominic Pileggi of Delaware County, said yesterday that he had told Nutter that the state must come to agreement on a 2010 budget before considering Philadelphia's requests.

It was unlikely, he said, that what he called the "Philadelphia bailout legislation" would be considered separately from the overall budget.

"The issues are intertwined," Pileggi said yesterday, adding that one of the the central disputes in negotiations involves hundreds of millions in education funding, "a disproportionate amount of which would go to Philadelphia's school district."

"There are other spending items that are Philadelphia-centric as well, so it's difficult to separate those from the relief Philadelphia is requesting," he said.

In other words - Rendell wants the state to fund more primary education state-wide based more on need, less on local school taxes and the defacto class segregation they translate to. Pillegi prefers the idea of parents "buying" into exclusive suburban school districts - screw the economic impact of towns and cities and rural counties with underserved or failing schools. America is about the God given right to promote sprawl as a way to enforce the class disadvantage and the rich's access to better public schools than everyone else. And he's so in love with that idea, he's willing to happily sit in DelCo and watch Philly burn like Rome to make sure it happens.

What a wonderful human being.

Maybe city workers and Philly cops should go out of their way a little to let Mr. Pileggi know what they think of him the next time he decides to go to a Phillies game or when they run into him "down-a-shore". Playing with basic public safety issues like a poltical football in a neighborhing town is not funny.

People in Philly tend to assume the people twisting the knife on us in H'burg are from Erie, when in reality some are only as far away as Media.
MrLuigi, my cat, actually only types half as badly as I do.


maybe philadelphians need to pay a visit to Mr. Pilleggi's personal residence and have a picket party like they did for jeffrey Lurie.

Not a bad idea

Of course there are Philly delegation Dems who are still working hard figuring ways to make the sales tax plan more regressive, more targeted at the poor and also produce less revenue. Just in the nick of time by gummit.

Rep. Boyle, here's an idea - if you are so concerned about Philly sales taxes effecting merchants figure out a way to fix the BRT from a state level so next time Council is at least willing to include property taxes as part of the revenue mix. That or get the 2% limit taken out of Act 71 pronto so Philly can eat casino revenue for basic operating expenses vis=a-vis the wage tax. Because right now an awful lot of cops, firefighters and city workers in your district are looking at pink slips in their future while you fiddle.

Its a little overly simplified but generally people in Philly send state reps to H'burg to try and figure out a way to bring back more money for stuff like local cops and libraries and rec centers. Not to work on ways to get more cops laid off and libraries and rec centers closed. Just a thought.
MrLuigi, my cat, actually only types half as badly as I do.

Sean, I am sorry I have not made my point clearer

You want to focus on the City’s deficit and budget, important points that progressives all too often ignore.
I am asking you to focus the expanding role of authorities in running our lives. At the risk of being pedantic, let me point out that more and more of the important budgeting issues are taken away from public bodies and placed in the hands of unelected authorities. (PHA, PAID, SEPTA,PPA,DVPA to name a few—right now as I write this the City’s main “quasi-public” development agency PIDC is in court saying they don’t have to follow the open records or sunshine laws that protect citizens)
Authorities have found ways of overcoming the City’s dept limit ration without giving citizens the right to decide. As an example, years ago when the City wanted to borrow above the debt limit to build veterans stadium, the bond issue was put on the ballot and a public discussion was had.
When it came time to build new stadiums, the proponents raised the money through authority debt and complicated lease/lease back agreements. The public was not allowed to decide if we wanted to pledge our tax dollars to stadiums. Despite the fact that courts have ruled that authorities do not have the right to collect taxes and authority bonds cannot be based on tax revenues, we have allowed authorities to do so.
Authorities do not guarantee the public the right to testify on decisions. I have been arrested for trying to speak at a PICA board meeting. When was the last time you read a news article or reviewed the minutes of an authority board deciding how to spend your tax dollars. Which bond counsels do they use? Which brokerage houses? Pin stripe patronage makes PPA look like the neighborhood corner store.
Solving the city’s budget problems is a very real concern. But we should also be concerned when we cede decisions to unelected unaccountable bodies that are taking the place of elected governments.
Thank you for considering my point of view, and at least on this topic I will stop typing and try and understand others.
Lance Haver

You have a point about the "authorities"

but PICA's mandate and budget compared to the DRPA, the RDA, SEPTA, etc. is positively tiny. The demands it make are modest and basically that Philadelphia budgeting process obey the laws that someone else passed. That State Senate Republicans are holding Philadelphia out off the edge of a cliff to extort budget concessions from the Governor and Assembley Democrats has nothing to do with the job PICA has done in asking for real numbers from Council. Nor that Council refuses to look at fixing the BRT or the political work of lessoning the shock for long-term residents of reality based assessments in neighborhoods where values have gone up and hence picked the politically "easy" but risky option.

One of the things that Fumo trials barely touched was how much the DRPA became for a period Fumo's personal bank for neighborhood improvement projects, many of which were nice, lovely projects but never approved or evaluated by anyone else. I mean that parking lot next to Eastern State Penitentiary is swell but I'm not sure its an essential investment in the region's transit infrastructure. There has been more recently some controversy about the stuff other than a soccer stadium - the grocery store and office development (and jobs) - that was supposed to be part of the deal for Chester, PA - that sort of got lost in the shuffle to build that soccer stadium. I get where you are coming from - but in this instance PICA is just the enforcement tool for what the courts have already said is law in terms of Philly passing a budget once and only once before July 1.

See Council already voted for a budget that said in essence "If its not the sales tax, budget amagedden is A-OK with us. We are happy with an all-or-nothing bet on sales taxes." Them signing off again on the doomsday budget they in essence already approved rather lackadaisically if H'burg screws us is more of formality. They already voted in place the horrible "what-if" scenario we are now sweating back in May.

MrLuigi, my cat, actually only types half as badly as I do.

I don't think there was a council vote for Plan B

The Inky reported a week or so ago that it was not approved. Further cuts have been left up to the Mayor.

Maybe I remember incorrectly

but as (yes) a PICA condition I believe they were forced to vote to approve some sort of a very bare bones "what-if" budget as a condition of passing Plan A. At the time there was criticism of PICA in political corners other than perhaps this one that PICA was being too lax in not demanding a more fleshed out accounting from the Mayor and Council up front. It was my understanding that it basically said what is being discussed now - if either the sales tax or the pension plan deferment did not happen (or both) that the Mayor would have the unenviable job of picking the cuts to bring the budget into balance. I thought that was the whole point of the the Council hearings where the Police and Fire Commish and the head of every department came to discuss how their departments would function with 10-20% cuts across the board or more. That Council had to go through the gesture of saying they determined civil order would not break down in Plan B or C happens.

I'll do a search or maybe Ben Waxman or someone can correct us on the details.

MrLuigi, my cat, actually only types half as badly as I do.

OK Dated June 23 coutesy of Brennan and Lucey

Please pardon the blockquotes but whats striking is how clear the current situation was as a possibility a month and half ago. You would think nothing had happened since then and that everyone is just following a script. Basically a number of people said we might be here now even as Councilman Green and Councilman O'Neil were putting together their compromise in the end of April. Look back at old articles and the iceberg's been coming for a long time.

The city's budget situation for the fiscal year starting next week is shaping up to be schizophrenic - with a best-case scenario, a doomsday alternative and a big question mark about Harrisburg.

Mayor Nutter and City Council hope that the state General Assembly approves measures to pay for the best-case scenario. They need the state to sign off on a plan that raises the sales tax by 1 cent on the dollar, that defers contributions to the city's pension fund for two years and that stretches out payments to that fund for 30 years instead of 20.

Without that approval, the city will use an alternative budget that still has not been detailed but is expected to rely on police layoffs, the elimination of Fire Department equipment and a reduction in trash collection.

The General Assembly is now hashing out its own budget with Gov. Rendell, who proposes a three-year, 16 percent increase in the state personal-income tax. The state budget typically does not wrap up by its June 30 deadline, but could stretch out for weeks or even months now due to the unpopular tax-increase idea.

The city's budget situation for the fiscal year starting next week is shaping up to be schizophrenic - with a best-case scenario, a doomsday alternative and a big question mark about Harrisburg.

Mayor Nutter and City Council hope that the state General Assembly approves measures to pay for the best-case scenario. They need the state to sign off on a plan that raises the sales tax by 1 cent on the dollar, that defers contributions to the city's pension fund for two years and that stretches out payments to that fund for 30 years instead of 20.

Without that approval, the city will use an alternative budget that still has not been detailed but is expected to rely on police layoffs, the elimination of Fire Department equipment and a reduction in trash collection.

The General Assembly is now hashing out its own budget with Gov. Rendell, who proposes a three-year, 16 percent increase in the state personal-income tax. The state budget typically does not wrap up by its June 30 deadline, but could stretch out for weeks or even months now due to the unpopular tax-increase idea.

So the House just passed the SB850 as the "stop-gap" budget which Rendell will strike all the line items from so state government will not come to grinding halt. The good news is state employees will not be going without paychecks, missing mortgage and credit card payments, etc. The bad news is that it takes away a lot of the pressure for Senate Republicans to compromise and so far they seem intent on digging in their heels. Which is very bad news for the city budget since the Senate Republicans also seem intent to hold it over the Governor and the Democratic House as a bargaining chip. Both the sales tax approval and the pension fund rejigger are on schedule to sail through the House and stop dead in its tracks in the Senate.

"I just don't know," said Uri Monson, executive director of the Pennsylvania Intergovernmental Cooperation Authority, which oversees the city budget. "There's so many new things here that I'm hesitant to guess what might happen."

Monson said that he recently came up with 10 budget scenarios for the city, based upon what he called an "unprecedented situation" of uncertainty with state and city finances. The city delivered its best-case budget yesterday and is expected to deliver details of the doomsday plan in the next couple of weeks.

As part of the doomsday plan, every city department is developing a priority list of programs to determine what would be cut first, Finance Director Rob Dubow said.

"If we have to go to a contingency plan, we'd have to shrink the size of the workforce," Dubow said

MrLuigi, my cat, actually only types half as badly as I do.

April 24 thanks to Marcia Gelbart

Again pardon the blockquote. Again eerily prophetic. We've been barrelling down the track toward the bridge the dastardly meanies with the handlebar mustaches were planning to blow up for quite some time. Again that oh so charming Dominic Pileggi promising to play to exactly the anti-Philadelphia sentiment he is doing right now.

But passage in Harrisburg is iffy at best, with even less certainty over whether either action - neither has yet been introduced as a bill - would come up for a vote before July 1, the start of the city's fiscal year. That's partly because lawmakers' attentions are consumed by a projected state revenue shortfall next year of $2.3 billion.

"My sense at this point is that the sales-tax increase will be very difficult to pass, and that it's too soon to tell how the pension initiative will fare," said State Rep. Josh Shapiro, a Montgomery County Democrat on the Appropriations Committee.

Of Nutter's sales-tax proposal, Senate Majority Leader Dominic Pileggi (R., Delaware) said, "There are some people that feel that treating Philadelphia [differently from the rest of the state] and simply allowing them to raise taxes is bad policy."

Even PFC gets Josh Shapiro to come out to meet-up every so often so I know he's a state rep of immense political skills and acumen. Did Council not seek to ask for any more details on this input back in April? It was in the newspaper right about the time Green was putting together the plan to do it all with the sales tax and no property tax component by borrowing from the pension fund of all places against future sales taxes.

Green is quoted saying he's not happy with the lack of details in Plan B and PICA also demands more details. The only difference between then and now is that the budget gap has gotten worse and the number of layoffs required keeps getting amplified by the ammount of time after July 1 we go without the sales taxes.

"They're cutting street-level service rather than the bureaucracy," complained Councilman Bill Green, who said the impact of Plan B could not be assessed because it was lacking in details. "Which engine companies will close?" he asked. None have been identified.

Still, the plan is being taken so seriously that the Pennsylvania Intergovernmental Cooperation Authority - the state-created agency charged with overseeing city spending - is meeting with department heads to evaluate whether Plan B is realistic. By statute, PICA must approve the city's budget by July 1.

Of the Police Department, Uri Monson, PICA executive director, said: "They need to explain to us how they function with 480 fewer officers." Of the Fire Department, he said: "What would be the impact on coverage, response times? We want to make sure they've actually figured out how they would do it."

Good questions. Questions you would think Council would have been more concerned about answering over the last more than 3 months. Alternately more than 3 months is a long time to try to think up some new, better ways to maximize going after "the bureaucracy" instead of "street-level cuts" as a just-in-case but I don't feel we've made any progress on that front either. Nor any progress on fixing the BRT - even though property taxes are the only taxes capable of raising enough income that don't require action from Harrisburg - if we are somehow miraculously allowed to "re-budget".

But on the other hand Councilman O'neil, the other big proponent of the "sales-tax only" solution, couldn't apparently even make it out to press conference in his district where Nutter and Commissioner Ramsey were talking specifically about how many of the police layoffs could end up being concentrated in his district specifically. And noticeably, not one member of Council deigned to walk downstairs to stand with the mayor and talk about possible hitches with the budget deal they hatched at the rally in City Hall the other day. Apparently they had more important things to do than to try to rally support for stopping completely shutting down libraries, rec centers, laying of 3,000 city workers. It would me leaving the air conditioning for one thing.

MrLuigi, my cat, actually only types half as badly as I do.

The useful role PICA could play

So PICA has been looking at what would happen in Plan B goes into effect? And wonders how we can function with 480 fewer police officers.

PICA's most important mission is to protect the revenue streams that service their bonds. That usually means focusing on the city budget. But maybe PICA can look at its mission a little different right now.

Perhaps it needs to stand up right now, very loudly, and say we can't function with these kind of reductions. It needs to say that the city would be so harmed by the reduction in services that the all-to-meagre advances of the last ten years would be reversed. It needs to say that, as a result, the city could well enter a prolonged depression so severe that payback of the PICA bonds would be threatened.

Maybe that would help wake up the General Assembly.

Well the GA, or rather the State Senate, must be woke up

but I would point out that because the revenue projections continued to worsen its no longer 480 fewer cops. Currently its between 600 and 800, tending more towards the higher number in recent statements.
MrLuigi, my cat, actually only types half as badly as I do.

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